‘Each Azure area is now AI-first,’ mentioned Microsoft CEO Satya Nadella
Microsoft delivered earnings up 24% year-over-year and income of $76.4 billion for the quarter, up 18% from the identical time final 12 months, pushed on the energy of demand for cloud and AI infrastructure and providers.
Microsoft Cloud revenues for the quarter had been stronger than anticipated at $46.7 billion, up 27%.
“Cloud and AI is the driving pressure of enterprise transformation throughout each trade and sector,” mentioned Satya Nadella, chairman and CEO of Microsoft.
On the quarterly name with buyers, he added: “The speed of innovation and the pace of diffusion is in contrast to something we have now seen. To that finish, we’re constructing probably the most complete suite of AI merchandise and tech stack at huge scale.”
When it comes to infrastructure-specific remarks from the decision, Nadella mentioned that Microsoft has opened new knowledge facilities on six continents and stood up greater than 2 gigawatts of recent capability prior to now 12 months. The corporate now has greater than 400 DCs throughout 70 areas. “We proceed to guide the AI infrastructure wave and took share each quarter this 12 months,” he mentioned.
Nadella additionally mentioned that Microsoft is “[scaling] our personal knowledge middle capability sooner than every other competitor” and that the infrastructure it’s constructing out is targeted on assist of AI workloads.
“Each Azure area is now AI-first,” mentioned Nadella.
Microsoft spent $24.2 billion in capital expenditures in the course of the quarter. CFO Amy Hood defined that greater than half of that determine was spending on “long-lived property that may assist monetization over the subsequent 15 years and past,” with the remaining capex going to servers, CPUs and GPUs. “Whereas we introduced extra knowledge middle capability on-line this quarter, demand stays greater than provide,” Hood mentioned.
She additionally mentioned that Microsoft would “proceed to take a position towards the expansive alternative forward throughout each capital expenditures and working bills, given our management place in business cloud, sturdy demand alerts for our cloud and AI choices, and vital contracted backlog.” However the firm nonetheless expects development in capex to reasonable in comparison with this previous fiscal 12 months.
The corporate’s prospects are quickly ramping their use of Microsoft’s AI instruments as effectively. Nadella famous that Microsoft launched Azure AI Foundry in the course of the previous 12 months to assist prospects design, customise and handle AI functions and brokers at scale.
“Clients more and more wish to use a number of AI fashions to fulfill their particular efficiency, value and use case necessities,” he mentioned. Foundry, he added, permits prospects to provision inferencing throughput as soon as after which “apply it throughout extra fashions than every other hyperscaler.” He added later within the name that AI is driving a “elementary change” in enterprise functions as prospects shift to agentic apps.
In the meantime, Microsoft’s Copilot apps have greater than 100 million energetic business and shopper customers — and rising. Nadella gave various particular examples: Barclays began with an preliminary deployment of Microsoft 365 Copilot with 15,000 staff and can now roll it out to 100,000 staff globally. UBS began with 55,000 staff and is increasing to all staff. Greater than 25,000 Microsoft 365 Copilot “seats” had been bought this previous quarter by Adobe, KPMG, Pfizer and Wells Fargo, in accordance with Nadella.
For the complete fiscal 12 months, Microsoft’s revenues had been $281.7 billion, up 15%, whereas its internet revenue grew 16% to hit $101.8 billion.
